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International Conference & Exhibition on Alternative Sources of Energy - 20-22 Feb 2010
Paragati Maidan, New Delhi, India
Know more from here - http://www.alten.in
Is Electrifying Growth for Indian Power Sector Possible?
Two articles I read earlier today stimulated my thinking on the Indian electricity market.
The first one was a report by McKinsey ( http://bit.ly/9FLU8m ) that forecast that India would require about 400 GW of installed capacity by 2017 from about 150 GW today. That's more than 150% growth within 7 years (a CAGR of 15%). The company's white paper had also detailed a roadmap to get there.
The second report was a recent article that mentioned that India planned to develop 100 GW of power sources between 2012 and 2016 ( http://bit.ly/buzARk ). "In the Indian government's next five-year plan beginning in fiscal 2012, the country aims to develop a total of 100 GW of new power sources combining hydro, thermal and nuclear power...The breakdown of the 100-GW capacity is 20 GW for hydropower, 3.4 GW for nuclear power and 76.5 GW for coal-fired thermal power, indicating that coal-fired power accounts for the majority of India's planned generation capacity. The plan does not factor in sources such as natural gas-fired thermal power, for which there is uncertainty over the future procurement of fuel, or renewable energies, which India looks to expand in the future..."
I thought it'd be a good idea to explore if there are commonalities between the roadmap provided by McKinsey and the way forward thought about by the Indian bureaucrats.
McKinsey had put forth the following action plan in order to achieve the 400 GW capacity:
(1) Address viability and market risks
(2) Accelerate capacity addition
(3) Secure fuel supplies
(4) Improve efficiencies
(5) Strengthen governance and implementation
Unfortunately, there were not enough details provided by the article. Not enough insights were available with regard to the strategy (outside of the proposed source mix) that would be adopted by the government to get there.
But there were a few nuggets of information that were instructive.
Read this: "Although India is targeting the development of 78.7 GW of new power sources in its current five-year plan (fiscal 2007 to 2011), the progress has been slow with power sources representing only 20% of the target capacity having reached commercial operation thus far. Nath cited a delay in equipment production by domestic manufacturers as the reason for the slow development, and added, "Measures have been taken including the use of overseas manufacturers. We will achieve a satisfactory state by 2012."".
It probably will be a good idea for the government to figure out why the domestic manufacturers did not measure up. What was the reason for the delay in equipment production? It's fairly obvious that depending on foreign capacity is not the most desirable way to "build capacity".
Whether or not the government plans to follow a framework on the lines suggested by McKinsey, my worry is that there could be similar shortcomings in equivalent, strategically important aspects - be it in improving efficiencies (what has the government tried to do on DSM?), or in addressing viability and market risks (I doubt if AT&C losses have decreased by any amount at all, I only keep hearing about increased quantum of electricity theft!).
I am not here on a complaining mission. I know (and I'm sure you do too) that there have been a number of measures the government has undertaken that are of strategic importance. There have been tens of news items that mentioned the various attempts by the government to secure gas, coal and oil supplies both within and outside India. I also understand that approvals of power projects have been relatively quick as well.
The point is, the chain is only as strong as the weakest link. Unless the government addresses all the strategic levers in a thorough manner, achieving such an audacious target (15% year-on-year capacity addition) is going to be near impossible.
Unfortunately, failure in our mission to achieve these targets will hurt us badly. Without sufficient electricity, I cannot imagine India being able to maintain our current economic growth.
Without power, we indeed will be powerless. It's as simple as that.
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Market Entry Strategy for Indian Renewable Energy Industry
Is your company keen on exploring the fast-growing renewable energy industry in India? Are you looking for expertise to evolve a comprehensive entry strategy for this industry? You should be talking to the EAI Consulting Team. More from here - http://www.eai.in/ref/services/ime_consulting.html
Updates on the latest in the Indian renewable energy industry
Indian project for 13,000 MW of renewable energy in Karnataka - It’s the world’s largest single investment in renewable energy sources, launched by Airvoice Group with a $50 billion investment over a 10 year period. Airvoice Group has proposed to set up a renewable energy sector project in Karnataka. (10,000 MW of Solar Power and 3,000 MW of wind power). More from here - http://www.evwind.es/noticias.php?id_not=4088 . Airvoice Who? Airvoice me - http://www.airvoicegroup.in/
Biomass Gasifier Systems in rice mills to substitute diesel - In view of the enormous potential for saving fossil fuels, specifically diesel, presently being used in rice mills for meeting their captive power requirements, the Ministry of New & Renewable Energy (MNRE) has recently launched new scheme for promoting rice husk based biomass gasifier systems. These systems would not only save diesel but will also provide cost effective reliable solution for their captive power requirements using rice husk produced in rice mills - http://pib.nic.in/release/release.asp?relid=57898 - Way to go, folks!
Won't allow 'red-tape' in new energy sector: Abdullah - The government today said that it will not allow "red-tape" in the new energy sector and was working to do away with difficulties faced by industry in the field. "The Raj (red-tape), which existed here, that will not be allowed to happen and we are doing away with all the red-tape. No doors will be found locked," New and Renewable Energy Minister Farooq Abdullah said while addressing a seminar on wind energy here. http://bit.ly/afBsSG - I somehow want to believe him.
Govt steps up drive to make office buildings green - In two years, Indira Paryavaran Bhawan, which comes under the Ministry of Environment and Forests and being constructed over a 9,000-sq mt plot at Aliganj in Delhi, will be showcased as the government’s drive to set up green buildings. It will have all the features of a green building: Enough sunlight, instead of artificial fluorescent lights; natural cooling, instead of air-conditioners; solar power, instead of artificial power generation, and much more. Though late in the day, government offices are fast trying to catch up with the private sector in eco-friendly construction. The ministry aims for Paryavaran Bhawan to be credited with the prestigious platinum rating under Leed-India (Leadership in Energy and Environmental Design, a green building rating system of the Indian Green Building Council). http://bit.ly/dtcTYx - Why am I hearing so much good news today?
MIT and MCCIA join hands to set up Indian Energy Institute - American Massachusetts Institute of Technology (MIT) Energy Initiative and Mahratta Chamber of Commerce, Industries and Agriculture (MCCIA) are exploring to set up an Energy institute in India to develop cutting edge green technologies post Copenhagen era. “We are here to set up the Indian Energy Institute to push the long term green energy agenda for clean environment with Indian industries with the help of industry chambers,” Ernest J Moniz, director, MIT Energy Initiative, said. http://bit.ly/b4Riv8 - We are on the move, folks!